Thursday 27th January 2011 5 Comments
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The businessman who caused a kerfuffle last year when he advocated partial privatisation of state assets is happy the Government is now behind the idea and believes the public will be too.
John Palmer, who is chairman of both Solid Energy and Air New Zealand, last year outlined the benefits of the so-called Air NZ model, which is now being proposed by the Government for the ownership of Genesis, Mighty River Power, Meridian and Solid Energy.
At the time Energy Minister Gerry Brownlee said Mr Palmer had over-stepped the mark.
Palmer said that despite the kerfuffle he had received very positive feedback from both business people and people in the community.
"I think the wider community is no longer hung up on the bogey that this is a path to a 100% sale," he said.
There was widespread support for a policy of long-term majority state ownership, while using capital markets to source new capital.
Palmer said he personally supported the position of the Crown maintaining majority ownership of key infrastructure assets.
But the listing of these companies on the market would create opportunities for them.
"There will be opportunities to leverage the skills we have in these businesses more widely.
"My speech last year talked of the need for these companies to grow and the Crown accounts not really being the right place to source the capital from," he said.
"In Air NZ, we have the proper pressures of the market and don't have quite the same political pressure and political scrutiny that takes the focus away form running the business day to day," he said.
The mixed ownership model would also help attract talent and executives with international experience who were happy to be in a commercial spotlight rather than a political one.
The generators would be particularly attractive to investors, he said.
Solid Energy was still largely a commodity business and an export business that suffered from fluctuations in the currency and energy markets.
"The important thing for Solid Energy is we have a potentially quite big investment programme in front of us.
"We are not pushing buttons yet but have a number of projects we are developing up so the timing for us would be excellent," Palmer said.
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